QUICK EDIT: Trouble on the export front

The country’s goods exports fell in March for the fourth month in a row giving rise to serious concern as this declining trend could adversely impact the overall growth rate and has already widened the trade deficit.

India’s annual trade deficit for the financial year ended March 31, 2015 has gone up to $137billion from $135.8 billion in the preceding year.

This is not such a worrisome feature as the decline in international prices of crude have also brought down the country’s import bill which has served to offset the contraction in exports.

India’s annual trade deficit for the financial year ended March 31, 2015 has gone up to $137billion from $135.8 billion in the preceding year

However, factories producing goods for exports are working at less than full capacity as the demand for Indian goods in Europe has started drying up and the US market remains weak.

This poses a major problem as a robust growth in exports is essential to push up the GDP growth and create more jobs.

A surge in exports would also help the country to earn a stable stream of foreign exchange that would strengthen the rupee and fundamentals of the economy.

In the current scenario, the country is excessively dependent on foreign inflows into the stock markets.

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This is hot money that can suddenly leave Indian shores which would send the rupee into a tailspin and destablise the economy.

PM Modi has set an ambitious goal of doubling exports to $900 billion over the next four years. He seems to be well aware of the crucial role that exports have to play but the slowdown in key markets appears to be coming in the way.

Exporters, on their part, have revived their demand for lower interest rates on loans to help them reduce costs.

But this is only part of the problem as they need to look for other markets . They also need to produce high quality goods and deliver them in time to compete with their rivals.